KazKom and Rakishev to by BTA Bank for 940 million dollars

28 декабря 2013, 12:54

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BTA bank is not going to be sold to Kazkommertsbank’s (KazKom) and Kazakhstan businessman Kenes Rakishev below its market price of $940 million, Saken Usser, Head of the Department of the Corporate Client Service at Freedom Finance told Tengrinews.

President Nazarbayev had instructed Samruk-Kazyna to sell its BTA Bank, Alliance Bank and Temirbank stock that it came to hold as a result of nationalization of the three banks during the crisis.

Saken Usser. Photo courtesy of kursiv.kz

The Wealth Fund has successfully finalized a deal to sell Alliance Bank and Temirbank to Bulat Utemuratov. However, withdrawing from BTA Bank has proved more difficult. Halyk Bank that initially intended to purchase the government-held BTA stock, but later renounced the intention. Recently Kazkommertsbank and Kenes Rakishev have declared themselves as possible buyers of BTA Bank.

Bulat Utemuratov. Photo courtesy of kursiv.kz

Earlier this month Kazkommertsbank and SAT Company Chairman Kenes Rakishev signed a non-binding preliminary agreement to initiate purchase of Samruk-Kazyna-held stock in BTA Bank. According to the preliminary agreement KazKom and Rakishev are going to purchase equal parts of the BTA Bank shares, and Samruk-Kazyna will retain a minority share in the Bank. After the purchase is finalized, the new owners intend to initiate a merger of Kazkommertsbank and BTA Bank.

“I don't expect KazKom to use its stock as payment in this deal. It is more likely that the Bank will exchange a part of its stock in Grantum Pension Fund and pay the rest in cash,” said Usser. The expert believes that the deal will improve the investment climate of Kazakhstan’s banking system and open new door to obtain cheaper funding from the West.

Anton Soroko, a analyst from FINAM Investment Holding, believes the the cost of the BTA deal will vary from 200 to 300 million dollars, depending on the additional conditions of the deal. Its problems with bad loans and the deal with Halyk Bank that fell through earlier this year will keep the cost of the deal low. “Samruk-Kazyna fund will have to temper its appetite, especially since it is supposed to comply with the President's instruction to withdrawal from the bank's capital,” said Soroko. The analyst believes that businessman Kenes Rakishev is interested in the deal because the price is attractive and he can recoup the investments several-fold after the bank is successfully revitalized.

Anton Soroko. Photo courtesy of urbc.ru

“I think that the most likely scenario of this deal would be to divide the business between two two owners into retail and corporate ones. This way there will be no need to spend money on a re-branding, since BTA bank is will known in Kazakhstan and the new owners should building up on the brand's visibility,” said Soroko. He believes that the new owners are likely to used borrowed funds to finance the integration processes and the possible subsequent merger.

Director of the Analysis Department of Asyl Invest Aivar Baikenov evaluates the real cost of BTA Bank at no more than $455 million. “The news is certainly unexpected, especially in the part of emergence of Rakishev as a new player in the BTA Bank field besides Kazkommertsbank. Rakishev’s financial and administrative resources could give a positively note to the bank's performance,” said Baikenov.

Aivar Baikenov. Photo courtesy of kursiv.kz

Baikenov believes that the possible merger of KazKom and BTA banks could give birth of a mega player that holds 26% of all the bank assets in Kazakhstan and a huge portion of band loans. “One of the possible scenarios after the purchase is to divide the bank in to a “bad” one and a “good” one. And since KazKom is going to be managing BTA, it is quite likely that all the toxic assets may be transferred to BTA and the quality assets may be transferred to KazKom," he said.

Nataliya Samoilova, Head of the Analysis Department at Golden Hills Capital AM, believes that the time for the deal is ripe: prices of the assets are low and the deadline set by President Nazarbayev is an additional factor. The President instructed Samruk-Kazyna to sell its BTA Bank stock by the end of 2013.

Samoilova does not rule out the possibility of the BTA shareholders becoming KazKom shareholders. “The chances are pretty high. In accordance with the legislation, in an acquisition of a joint stock company the stock of the acquired company is revoked an all of its property, rights and oblations are transferred to the acquirer. This means that when BTA Bank becomes part of KazKom, the shareholders of the former will get shares in the merged bank,” commented the expert.

Olzhas Khudaibergenov. Photo courtesy of kursiv.kz

Director of Macroeconomic Research Center Olzhas Khudaibergenov believes that the cost of the deal will depend on the evaluation of future profits and losses, since different scenarios are possible in BTA’s future. He predicts that finalization of the deal will take place in the first quarter of 2014.

As of September 30, 2013, BTA Bank's assets amounted to 10.4 billion dollars, the net worse of the bank made 1.9 billion dollars and the net profit made 156 million dollars.